By Jeanny Lim
Photo by Sam Jang
“In the analog territory, we can’t beat Sony,
for example. But in the digital domain, if we compete with Sony’s security business, we can win.”
On December 7, 2005, staffs of IDIS, the world`s leading developer of Digital Video Recorders (DVRs) were having a small Pizza party in the Seoul headquarters celebrating their Chief Executive Young-Dal Kim`s winning of the IMI Business Management Award from the Federation of Korean Industries. The award was given to him for his outstanding achievement in developing an innovative technology that can contribute to the nation`s competitiveness in the security sector and turning a start-up into a US$700 million company that employs 200 workers and produces 100,000 units of DVRs a year. The award is just one of many Kim received in 2005.
DIGITAL, THE OPPORTUNITY
In terms of market share, IDIS is de facto one of the top 3 manufacturers of DVRs in the world. (Photo by Sam Jang)
Kim is an engineer-turned businessman who has a doctor`s degree in Computer Science from Korea Advanced Institute of Science and Technology (KAIST) in Daejoen, Korea. He holds six patents: two of them are local and the other four are international. In 1995, when Kim was studying at KAIST, his professor sent him to a Silicon Valley company as a dispatched researcher saying he should go out and experience to broaden his view of the world. So Kim spent about a year in the U.S.A. It was a life-changing experience for him. Before he went to America, he thought engineers` career choices were quite limited: they mostly become researchers or professors. In Silicon Valley, he realized there were many ways an engineer could make his dream come true: one of them was through entrepreneurship. He came back to Korea and made up his mind to start a company. After gathering US$50,000 in seed money by taking on part time jobs for some big projects, he and four of his colleagues established IDIS (Intelligent Digital Integrated Security). In fact, he had no particular business item in mind when he decided to start up his own business. With no money, no experience, but technology, he figured out the only way to be the world`s number one was to target a market which could be reshuffled by a new technology; to him it was the digital technology. "The video surveillance market quickly popped up on his radar screen. When it comes to digital, there was no dominant player in the security industry and everyone had to begin on the same starting line. "In the analog territory, we cant beat Sony, for example. But in the digital domain, if we compete with Sony`s security business, we can win,"explains Kim.
MAKE IT HAPPEN!
Kim established IDIS in 1997 when the security industry was just beginning to understand the benefits of digital video recording. There were some analog CCTV companies who showed off digital video recording technology at security shows, but their DVR products were far behind of real-world use: they were just displays. At that time, everybody knew the transition from analog to digital would certainly come, but no one knew how to make that happen. Kim produced his first DVR, IDR 1016, a year after establishing his company. IDR 1016 was PC-based and four times better than the existing DVRs in performance and most importantly, it reached a level where it could actually work. His DVRs were sold. Then the 2000 Sydney Olympic Games provided IDIS with a big boost. In 1999, the Australian government announced it would equip all of its Olympic venues with digital security systems and tested products from around the world. IDIS DVRs were recognized as one of the best products. Through the test, the company gained a strong foothold to penetrate the Australian security market and it now maintains 65% market share in Australia.
AHEAD OF THE CURVE
Though his PC-based DVRs were selling well, Kim did not see the PC-based digital video recording technology would bring him much success. Based on what he witnessed in the market, he concluded the PC-based digital video recording technology was too sophisticated for the average user. And competition started to grow by that time. He shifted his focus and began to develop embedded DVRs, three years ahead of others. Today, IDIS has the widest line of embedded DVRs and produces most DVRs in the world. In terms of market share, IDIS is de facto one of the top 3 manufacturers of DVRs in the world along with GE Kalatel and Dedicated Micros. Kim sees solution as the next big thing. "The market needs solutions to integrate and manage thousands of DVRs. I think by adding solution capabilities to the companys already strong product line business, IDIS can grow further and consolidate its market leadership," he said. He is preparing for the next wave.
Today, IDIS has the widest line of embedded DVRs and produces most DVRs in the world. (Photo by Sam Jang)
NIMBLE, TIMELY APPROACH
What is unique about IDIS success is 90% of its sales come from overseas. When it initially drew up its marketing plan, the Seoul-based company made a bold decision to strategically focus on the international security market while running its domestic business on a minimal scale. Kim recalls, "When we introduced our first product in 1998, we had limited resources. We had to decide how to and where to use the limited resources to get maximized effects. The domestic market required too much resources and it took more than a good technology to win the market. Our choice was the international market. In the international market, it is the technology that matters. You are judged on your technological capabilities. Thats the way to go, I thought." After seven years of relentless product innovation, vigorous marketing and smart partnership strategy, IDIS achieved astonishing international sales growth. But as the companys resources and the domestic market are growing, Kim sees time has come to pay more attention to the domestic market. In 2005 10% of IDIS sales were from the domestic Korean market. Kim predicted that number would be 15% in 2006. He worked harder to increase the company`s domestic market share to over 50% in 2006 to be the number one DVR producer in Korea
"3 ONE" GOALS
If everything goes as planned, the year 2007 will a milestone year for Kim and his company. He is hopeful that his so-called "3 One" goals should be completed in 2007. "By 2007," he says, "we will have reached one hundred billion won in sales and one hundred million dollars in exports, and become the number one DVR company in the world."
Kim, a former engineer, says he does not think of himself as a born businessman. But it seems that he has the inherent capability of overcoming the challenge coming in converting a personal passion into a viable business without losing the artisanal spirit in the transition.
Jeanny Lim is editor-in-chief of SecurityWorld INTL. Send your comments to email@example.com.
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